Providence Mayor, Council Housing Fight Shifts to State House

The battle over the taxation of affordable housing in Providence is heating up between the City Council and Mayor Taveras -- and could be moving to the State House.

Last week, the City Council approved an ordinance to maintain the 8% tax treatment for the development of affordable housing, following efforts last month by the Administration to grant tax stabilization agreements to new developments instead, including the Sanofka Apartments project in the West End.

"It would put Providence at a competitive disadvantage," said Providence City Councilman Luis Aponte, if the recent City Council ordinance is vetoed by the Mayor -- which Aponte along with others are saying is a strong possibility. "The ordinance reaffirms the state law, and it clarifies unequivocally the question of new construction."

Groups that praised the City Council's 8% support include the West Elmwood Housing Development Corporation. "I'm really excited by what the City Council has done. They've confirmed predictability, and confirmed $23 million for one of the poorest neighborhoods in Providence," said Executive Director Sharon Conard-Wells, of the Council's ordinance approval on Thursday.

However, legislation has been introduced in the General Assembly by the Mayor's Acting Deputy Chief of Staff, State Senator Maryellen Goodwin, that would increase the affordable housing tax rate from 8% to 10%. Last year, State Representative Lisa Baldelli-Hunt introduced legislation to increase the tax rate from 8% to 15%, which was approved in the waning hours of the session, but ultimately vetoed by Governor Chafee.

Rhode Island Housing affirmed its support this week for the Council's effort to maintain the 8% tax treatment. "We sent a note to the City Council after the bill passed [last week] that we were pleased to hear the Council reaffirmed the city's longstanding commitment to the 8% tax treatment, and the West Elmwood project," said Mike Milito with Rhode Island Housing.

Chris Hannifan, Executive Director of the Housing Network of Rhode Island, spoke to the importance of the existing 8% tax treatment for her members.

"I have members in the City of Providence and we applaud the City Council for stepping up to address the problem presented currently by the Administration," said Hannifan. "I understand, as a member-based organization, that municipalities are strapped for money. These developments are developed, however, with the understanding that they're rent restricted, and underwritten at this 8%."

"When you start playing around with the taxes -- my members bring in a lot of outside investment -- we know that investors would then be leery to come in," said Hannifan. "Last year, outside investors wrote in to the Governor to express their concerns about the approved tax increase from 8% to 15%. We have a strong grassroots campaign. We were fortunate the Governor listened."

West Elmwood's Conard-Wells spoke to role of money in the affordable housing equation. "What motivates us, what [the Council] has accomplished confirms what other municipalities throughout the state and recognizing. I'm excited that we were able to meet with people all over the city to understand how important this is, in a time of shrinking resources, to leverage outsides money for the city. It's not just housing development, it's community development, and leveraging resources."

Hannifan said that her group had concerns for the proposal this year in the General Assembly by Senator Goodwin for the tax treatment hike from 8% to 10%. "I'm looking to speak with Senator Goodwin on the issue," said Hannifan.

Neither the City of Providence nor Senator Goodwin responded to request for comment, or if there was any conflict of interest.

Community Concern for Proposed Changes

Rhode Island State House

"The community that came out in support of this, it's usually just the people involved in the project," said Canard-Wells. "This is an industry-wide effort. This isn't just West Elmwood saying please help me. There were other CDCs, residents, this is a crucial issue for the affordable housing industry -- it's an industry issue, not a project issue."

"They're looking for revenue enhancement," Aponte said of the city's efforts. "These projects occur in our most challenged neighborhoods. You can't do this downtown. This is low-moderate income housing for folks who are our low-wage workers, who can't afford a market-rate."

"I hear from people all the time how expensive it is to live in the city. There's been a lot of churning, with parents not able to find affordable safe housing. If you lived in the West End in September, then you moved to Charles Street, you're moving your kids through multiples schools," said Aponte. "If you want to stabilize families, you need a stable place to live -- a safe, affordable, place to live, then you can give families the things they need to achieve, and move towards success."

Related Slideshow: The Most Affordable Communities for Renters

In the below slides, communities are ranked from most affordable to least affordable. Affordability is determined based on the ratio of the median income in a community the average rent for a two-bedroom apartment. Find out where your community ranks.

About the ranking: Data was provided by the Providence Apartment Association. Median income figures are taken from the U.S. Census Bureau’s American Community Survey, which provides a five-year sample of incomes between 2007 and 2011. Rents are taken from survey data collected by Rhode Island Housing. Because of the insufficiency of rental data, the following 11 communities are not in the ranking: Exeter, Foster, Glocester, Hopkinton, Jamestown, Little Compton, New Shoreham, Richmond, Scituate, Smithfield, and West Greenwich.

Note: Since median incomes were only available for Providence as a whole, and not able to be broken out separately for the East Side, the apartment rental data for the East Side is included with the rest of the city. The data for the rents in the East Side and the rest of the city was merged using a weighted algorithm based on the approximate geographic range, putting one sixth of apartments on the East Side and rest in the city.